Superannuation groups have pressed federal Treasury to require insurance coverage warnings under regulations banning advertisements of certain super products to new employees.

Treasury consulted on the planned rules last month after parliament passed laws prohibiting the marketing of products during employee onboarding periods.

The Super Members Council says it “supports the direction of the draft regulations and considers the framework could be strengthened further” to ensure the ban operates “even more effectively”.

“SMC recommends … a more explicit warning about insurance impacts when employees are prompted to choose or change funds, noting the current approach is a general statement,” the council says in a submission to Treasury.

The council says insurance is “one of the biggest hidden consequences of switching super funds. People making an onboarding decision are often less likely to understand or actively check their insurance coverage matches their work risk profile.”

Treasury says a 2022-23 review of super reforms found evidence of software providers undermining super stapling by directing employees towards products they were being paid to advertise.

Changes to the Treasury Laws Amendment (Supporting Choice in Superannuation and Other Measures) Bill 2025 introduce a ban on advertising super products, with exemptions.

SMC says the proposed regulations already require “clear and unambiguous” disclosures to accompany permitted advertising.

“A short, plain warning about insurance consequences is consistent with that intent and would strengthen consumer outcomes,” its submission says.

“A good, simple disclosure Treasury could encourage in guidance could be: ‘Warning: changing super funds may change or cancel your insurance. Check your cover before you switch.’ ”

The Association of Superannuation Funds of Australia says the regulations should mandate “prominent, standardised” insurance warnings and disclosures at onboarding.

Its submission says there should be mandatory disclosure when a member’s stapled fund may not provide appropriate insurance for their job or circumstances, and a requirement to highlight key insurance differences, including hazardous occupations exclusions or inclusions.